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All Bork, No Bite: Dogging Microsoft

Robert H. Bork, self-professed champion of the free market, has weighed in against Microsoft and lined up with the Justice Department’s Antitrust Division under Clinton acolyte Joel Klein. Bork denies that he has reinvented himself, dismissing critics who say he was seduced by fat consulting fees from Microsoft’s arch-rival, Netscape. Nonetheless, the former judge and Supreme Court nominee has astounded partisans on both sides of the dispute, who recall that his non-interventionist approach to antitrust dates back more than two decades.

What triggered this transformation? One explanation may be that Bork is wrong on the facts. Writing in the Washington Times, he contends that Microsoft’s “restrictive license terms prevent any manufacturer from using competitive software.” It would be tempting to forgive such an outright blooper, but Bork makes matters worse in the New York Times. There he asserts that PC makers are not permitted “to alter the first display screen from that required by Microsoft.”

Those charges are utter nonsense. PC makers can load whatever software they want onto a Windows system, including software from Microsoft’s rivals. They can promote their own content on the opening screen, display icons for competing products, create their own browser “channels,” or even hide the channels altogether. More important, PC users — the folks antitrust laws are supposed to help — have virtually total control over the Windows desktop. They can add and delete products, add and delete icons, replace the Windows opening screen with a “shell,” add channels or exclude the channel bar completely — all with a few clicks of the mouse.

Bork’s antitrust analysis rests on a 1951 Supreme Court case, Lorain Journal v. United States. A newspaper in Lorain, Ohio, served 99 percent of the families in the city. When a radio station began competing for advertising, the newspaper refused to accept local ads from anyone who advertised on the radio. The Court held that the publisher’s exclusionary policy violated the Sherman Act. Bork writes in the Wall Street Journal, “the parallel with Microsoft is exact.”

That’s quite a statement from a reputed expert in law and economics. In fact, the Lorain case is irrelevant here. The shelf life of a newspaper ad is minimal, which gives a monopoly supplier considerable leverage. Customers must renew their purchase each time they advertise. By comparison, the shelf life of an operating system is measured in years. Accordingly, if Microsoft wants to extract added revenue from consumers — say, by selling them Windows 98 — it must convince them to discard a perfectly acceptable system (Windows 95 or 3.1, or maybe even MS-DOS).

That competition disciplines Microsoft: the company’s most formidable rival is itself. Microsoft cannot alienate consumers who might buy its new system — especially when those consumers already have a serviceable system that works fine. In short, Microsoft needs its customers more than its customers need Microsoft.

The relevant market share statistic is not the 85 to 90 percent of PC operating systems that Microsoft is purported to have sold but the 33 percent that represent Windows 95 installations. If the consumer already owns Windows 3.1, he cannot be “coerced” into buying Windows 95. How powerful is the “monopolist” that can persuade only a third of its own customers to buy its flagship product?

The remedy that Bork proposes for Microsoft’s alleged misconduct is a “must carry” order — a directive that Microsoft must load a competing browser, Netscape Navigator, on the Windows desktop. That remedy is an incredible overreach. Tellingly, it was co-opted by the Justice Department in its latest complaint, providing an important clue to what drives this crusade. Anyone who reads the complaint, along with the supporting memorandum, will be appalled to find “Netscape” mentioned no fewer than 130 times — an average of once per page.

Robert Bork and his new-found friends at the Antitrust Division intend to mutate Microsoft’s private property into something that belongs to the public, to be designed by bureaucrats and sold on terms congenial to rivals bent on Microsoft’s demise. Bork endorses that foolishness, evidently oblivious to the destructive implications of stripping Microsoft’s owners of their property.

The principles are straightforward: No one other than Microsoft has a right to its operating system. Consumers cannot demand that it be provided at a specified price or with specified features. Competitors are not entitled to share in its advantages. By proposing that the Windows desktop be expropriated and exploited for the benefit of competitors, or even consumers, Robert Bork has aided and abetted his enemies on the left, violated the principles he has long embraced and done an enormous disservice to those of us who still have a healthy respect for free markets and a free society.